Odd Hoftun, a few other expats, and a crew of increasingly skilled Nepali foremen and construction workers built the United Mission to Nepal (UMN) hospital in Tansen between 1958 and 1963. But long before the building was finished Hoftun had already begun laying the groundwork for a new project that would institutionalize the model of skills training, capacity building, and job creation that he had experimented with at Tansen. Already by the early 1960s plans for a UMN-supported trade school were beginning to take shape—a controversial idea for those who thought that missionaries should only be involved in human services like education and health. Recognizing that such a school would require electricity to operate, on the long walks between Pokhara and Tansen (before motorable roads arrived) Hoftun had already identified the Andhi Khola Valley as a promising building site because of the area's power-generating potential. But when he approached the Ministry of Industry for permission to start a training institute, the minister in charge (himself from the Tarai) requested that the school be located in Butwal, then a small, dusty bazaar town at the foot of the mountains below Tansen. The Tinau River that tumbled down a steep, narrow, rocky gorge just above Butwal was not ideal but had some hydropower potential. A poor road linked Butwal with the Indian border, and footpaths led into the hills to Tansen, Pokhara, and all the way to Tibet. But a proposed East–West Highway on the Tarai would, someday, make Butwal a crossroads. For UMN this foray into industrial training and development was a completely new departure in mission activity but, in spite of some resistance, Hoftun was given the go-ahead.

UMN signed a formal agreement with the government of Nepal on November 7, 1963, according to which UMN would build, staff, and manage an “Institute of Technology and Industrial Development” (ITID) and the government would deed a large parcel of land—about 4 hectares of level ground along the main north–south road, with further land for living quarters extending up into the adjacent hills. Popular usage soon shortened the name to “Butwal Technical Institute” (BTI).